SHANGHAI — China might soon double the minimum capacity required for companies to start secondary aluminum production.

New secondary aluminum producers must have a capacity of at least 100,000 tonnes per year, according to draft rules issued Jan. 28 by the country’s Ministry of Industry and Information Technology (MIIT).

The earlier requirement, issued in 2007, was for a 50,000-tonne-per-year capacity.

China’s scrap aluminum industry is dominated by thousands of small-scale, family-owned operations, with Ye Chiu Group and Shanghai Sigma Metals Inc. the only big players.

The new draft rules further stipulate that the ratio of equity capital in such investment projects must be a minimum of 35 percent. This wasn’t a requirement under the earlier rule.

New plants also must be equipped with facilities to treat hot ashes left over from production in order to raise metal recovery rates and protect the environment.

MIIT’s new draft rules were issued after the ministry and 11 other government bodies set out guidelines on Jan. 22 for consolidation and restructuring of nine industries, including aluminum, rare earths and steel.

A version of this article was first published by AMM sister publication Metal Bulletin.